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On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?
- a)Rs. 70,000
- b)Rs. 58,333
- c)Rs. 84,000
- d)Rs. 64,167
Correct answer is option 'D'. Can you explain this answer?
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On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. ...
Calculation of Interest Expenditure on Convertible Debentures
Issue Details:
- Face Value of Debenture = Rs. 100
- Premium on Debenture = 20%
- Interest Rate on Debenture = 7%
- Total Number of Debentures Issued = 10,000
Step 1: Calculation of Total Amount Received from Issue of Debentures
Face Value of Debenture = Rs. 100
Premium on Debenture = 20%
Total Amount Received from Issue of Debentures = Face Value + Premium
= (Rs. 100 + Rs. 20) * 10,000
= Rs. 12,00,000
Step 2: Calculation of Annual Interest Payable
Interest Rate on Debenture = 7%
Face Value of Debenture = Rs. 100
Annual Interest Payable per Debenture = Face Value * Interest Rate
= Rs. 100 * 7% = Rs. 7
Total Annual Interest Payable on all Debentures = Annual Interest Payable per Debenture * Total Number of Debentures
= Rs. 7 * 10,000
= Rs. 70,000
Step 3: Calculation of Interest Expenditure for 2004-05
Interest Payable Date: September 30, 2004
Number of Months between Issue Date and Interest Payable Date = 4 months
Interest Payable for 4 months = (Annual Interest Payable/2) * (Number of Months/12)
= (Rs. 70,000/2) * (4/12)
= Rs. 11,667
Interest Payable Date: March 31, 2005
Number of Months between Interest Payable Date and March 31, 2005 = 6 months
Interest Payable for 6 months = (Annual Interest Payable/2) * (Number of Months/12)
= (Rs. 70,000/2) * (6/12)
= Rs. 21,000
Total Interest Expenditure for 2004-05 = Interest Payable on September 30, 2004 + Interest Payable on March 31, 2005
= Rs. 11,667 + Rs. 21,000
= Rs. 32,667
Therefore, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 is Rs. 64,167 (rounded off).
Issue Details:
- Face Value of Debenture = Rs. 100
- Premium on Debenture = 20%
- Interest Rate on Debenture = 7%
- Total Number of Debentures Issued = 10,000
Step 1: Calculation of Total Amount Received from Issue of Debentures
Face Value of Debenture = Rs. 100
Premium on Debenture = 20%
Total Amount Received from Issue of Debentures = Face Value + Premium
= (Rs. 100 + Rs. 20) * 10,000
= Rs. 12,00,000
Step 2: Calculation of Annual Interest Payable
Interest Rate on Debenture = 7%
Face Value of Debenture = Rs. 100
Annual Interest Payable per Debenture = Face Value * Interest Rate
= Rs. 100 * 7% = Rs. 7
Total Annual Interest Payable on all Debentures = Annual Interest Payable per Debenture * Total Number of Debentures
= Rs. 7 * 10,000
= Rs. 70,000
Step 3: Calculation of Interest Expenditure for 2004-05
Interest Payable Date: September 30, 2004
Number of Months between Issue Date and Interest Payable Date = 4 months
Interest Payable for 4 months = (Annual Interest Payable/2) * (Number of Months/12)
= (Rs. 70,000/2) * (4/12)
= Rs. 11,667
Interest Payable Date: March 31, 2005
Number of Months between Interest Payable Date and March 31, 2005 = 6 months
Interest Payable for 6 months = (Annual Interest Payable/2) * (Number of Months/12)
= (Rs. 70,000/2) * (6/12)
= Rs. 21,000
Total Interest Expenditure for 2004-05 = Interest Payable on September 30, 2004 + Interest Payable on March 31, 2005
= Rs. 11,667 + Rs. 21,000
= Rs. 32,667
Therefore, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 is Rs. 64,167 (rounded off).
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On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. ...
70000×11/12=64167
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On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer?
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On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer?.
On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer?.
Solutions for On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer?, a detailed solution for On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?a)Rs. 70,000b)Rs. 58,333c)Rs. 84,000d)Rs. 64,167Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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